Self-employment blamed for one in six mortgage rejections

Self-employment is being blamed for one in six mortgage rejections in the UK, according to new research by Haysto.

A study from the specialist mortgage broker platform found that 17% of potential homeowners who have been denied a place on the property ladder have attributed their rejection to running their own business.

Those rejected for mortgages also blamed being registered as a sole trader (15%) or being a directors of a limited company (14%), according to the findings.

Haysto also stated that its research, based on responses from a sample of 2,012 adults in the UK, found that being rejected for a mortgage can have a “devastating impact”. The study found that 31% of respondents claimed mortgage rejection had left them feeling depressed, while another 29% stated they were treated unfairly.

“Getting a mortgage when you’re self-employed can be difficult, as mortgage lenders tend to prefer people in full-time employment because it’s easy and simple to understand their income,” commented Haysto co-founder, Paul Coss. “Being self-employed, your income isn’t as straightforward, and people shouldn’t be penalised for that.

“Despite self-employed people usually earning more money than if they were on a salary, mortgage lenders just aren’t set up to deal with complex incomes.

“There are just under five million self-employed people in the UK and we don’t think it’s fair that mortgages should be more difficult if you choose to earn your living this way, especially as COVID has impacted the self-employed so much in the last year already.”

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